Dow strikes record high as broader market weakens

Reuters Staff

3 Min Read

NEW YORK (Reuters) - Rising shares of Boeing pulled the Dow Jones Industrial Average up to a record high on Thursday, while the S&P 500 fell as investors saw higher-than-expected inflation increasing the chances of an interest rate hike.

The Dow’s third consecutive all-time high was driven in part by Boeing BA.N, which rose 1.36 percent after Deutsche Bank raised its price target on the aerospace and defense stock.

The S&P 500 and Nasdaq moved lower after a Labor Department report showed consumer prices rose more than expected in August, boosting the odds of another interest rate hike this year.

The consumer price index’s (CPI) 0.4-percent gain last month was its biggest in seven months and is the last major economic data to be released ahead of the Federal Reserve’s Sept. 19-20 policy meeting.

“I don’t think the market was expecting that kind of a strength in terms of inflation,” said Victor Jones, director of trading at TD Ameritrade.

“What people want is know is whether or not Yellen is going to talk about the lack of inflation as transitory, or whether it is continuing to concern them.”

After the data, the odds of a hike in December rose above 50 percent for the first time since July, from 41.3 percent, according to CME Group’s FedWatch tool.

The Dow .DJI rose 0.2 percent to end at 22,203.48 points, while the S&P 500 .SPX lost 0.11 percent to 2,495.62.